Helios Towers Plc · LSE:HTWS
Helios Towers — H1 2021 Earnings Presentation
32 slides from Helios Towers's earnings presentation, Aug 19, 2021
Slide 1: H1 2021 Results
H1 2021 Results 19 August 2021
Slide 2: Helios Towers team today
Helios Towers team today Tom Greenwood Kash Pandya Manjit Dhillon Chief Operating Chief Executive Chief Financial Officer / Officer Officer CEO-Designate Helios Towers plc 2
Slide 3: Agenda
Agenda 1 Highlights – Kash Pandya, CEO 2 Strategic Updates – Tom Greenwood, COO 3 Financial Results – Manjit Dhillon, CFO 4 Q&A Helios Towers plc 3
Slide 4: Highlights
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Slide 5: H1 2021 highlights
H1 2021 highlights SOLID REVENUE +4% revenue growth from $204m in H1 20 to $212m in H1 21, driven by GROWTH Senegal acquisition and steady organic growth CONTINUED EBITDA +5% Adj. EBITDA growth from $109m in H1 20 to $114m in H1 21, with +1ppt FINANCIAL EXPANSION margin expansion to 54% Successfully
Slide 6: H1 2021: Strong tenancy growth, driven by Senegal acquisition integration
H1 2021: Strong tenancy growth, driven by Senegal acquisition integration (1) (2) Tenancies Adj. EBITDA (US$m) Portfolio free cash flow (US$m) • Illustrates the core driver of business • Highlights growth and operational • Measures the unlevered free cash flow growth performance of our business gene
Slide 7: H1 2021: Sustainable Business Strategy update
H1 2021: Sustainable Business Strategy update Sustainable Business Report • Published inaugural Sustainable Business Report in March 2021 • Aligned to GRI(1) and SASB(2) reporting H1 frameworks. Detailed disclosures for each 2021 included in the appendix • Joined the UN Global Compact Network as par
Slide 8: Q2 2021: Recent developments
Q2 2021: Recent developments Closing of Free Senegal Omantel tower portfolio Strengthened balance tower portfolio acquisition acquisition sheet for future growth Closed the acquisition of 1,207 sites On 11 May entered into agreement On 16 June we successfully and 1,264 tenancies from Free to acquire
Slide 9: Strategic Updates
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Slide 10: Successfully executing growth strategy
Successfully executing growth strategy Pro forma characteristics HT presence H1 2021 PF H1 2021 Acquisitions(1) Executive HQ Dubai Markets 6 11 13,720 / Senegal Oman Chad Sites 8,603 14,735 (incl. committed BTS) Ghana Annualised DRC (2) 454 c.600 Congo B revenues ($m) Gabon Annualised (2) 243 c.310
Slide 11: Strategy driving further growth and diversification
Strategy driving further growth and diversification (1) (1,3) Sites Annualised Revenues ($m) Annualised Adj. EBITDA ($m) 13,720 day 1 / 8,603 454 c.600 243 c.310 14,735 incl. committed BTS +32% +28% +71% 1,015 40 59 27 2,890 19 19 89 3 3 14 14 38 6 39 6 24 24 2,227 28 28 43 43 1,207 247 1,207 247 10
Slide 12: Acquisition integration: Senegal case study
Acquisition integration: Senegal case study Leadership team in place New markets integration Leon-Paul Manya Philippe Loridon Marlene Kinoffo-Zounon Director of Integration CEO Middle-East & CEO Central & West Africa Exec Joined 2011, previously CEO HT DRC East Africa Joined 2011, previously held Jo
Slide 13: Enlarged portfolio primed for growth
Enlarged portfolio primed for growth Tenancies Growth opportunity Organic Sites 30k points of service forecast Tenancies across our 11 announced and existing markets (2020 – 2026)(3) 1.71x 1,015 committed BTS in new markets and continued BTS growth c.23.5k in existing markets 1.99x 0.05x – 0.1x aver
Slide 14: Financial results
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Slide 15: H1 2021: Strong growth driven by integration of Free Senegal's tower portfolio
H1 2021: Strong growth driven by integration of Free Senegal’s tower portfolio during Q2 21 YoY QoQ In US$m, unless H1 21 H1 20 % change Q2 21 Q1 21 % change otherwise stated Revenue 212 204 4% 109 104 5% (1) Adj. EBITDA 114 109 5% 58 56 5% Adj. EBITDA margin (%) 54% 53% +1ppt 54% 54% - (2) Annualis
Slide 16: Q2 2021: Senegal integration driving growth
Q2 2021: Senegal integration driving growth Evolution of sites portfolio Evolution of tenants Evolution of tenancy ratio Organic(1) +21% Organic +15% Organic -0.11x +4% +6% +0.04x +17% +9% -0.15x Organic Organic Organic +0.5% +0.6% 0.00x 8,603 17,090 15,732 1,264 7,358 1,207 14,906 419 629 411 620 7
Slide 17: Q2 2021: Strong performance driven by Senegal acquisition and steady organic growth
Q2 2021: Strong performance driven by Senegal acquisition and steady organic growth Revenue ($m) Adj. EBITDA ($m) Adj. EBITDA margin (%) Organic(1) +6% Organic +6% - Organic +2% +2% +2% +5% Organic +5% Organic - +0.5% +0.5% 102 104 109 58 54% 54% 54% 55 56 Q2 20 Q1 21 Q2 21 Q2 20 Q1 21 Q2 21 Q2 20 Q
Slide 18: Strong currency hedged business underpinned by long-term contracts
Strong currency hedged business underpinned by long- term contracts with blue-chip mobile network operators H1 2021 revenue breakdown by customer H1 2021 revenue breakdown by FX (2) Other 99% LCY (CPI) 61% 1% revenues from 22% hard currency multinational MNOs (1) USD LCY (Power) 54% 17% CFA Franc/ E
Slide 19: H1 2021: Cost and tower cash flow analysis
H1 2021: Cost and tower cash flow analysis Annualised OpEx per site (US$k) (1) Annualised cash flow per tower (US$k) (2) H1 21 opex: $70.4m 23.4 39.4 37.2 36.5 20.1 19.5 34.1 18.7 18.1 29.6 2017 2018 2019 2020 H1 21 2017 2018 2019 2020 H1 21 SG&A mix (3) Commentary H1 21 SG&A: $27.8m • H1 21 HoldCo
Slide 20: H1 2021: $237m deployed of $1bn FY21E capex
H1 2021: $237m deployed of $1bn FY21E capex Capex breakdown ($m) H1 21 Commentary FY 21 YTG H1 21 capex of $237m, reflecting $59m in our c.$1,010m established markets and $178m in Senegal (of which c.$108m - $1,040m $173m acquisition capex(1) and $5m growth, upgrade c.$575m and non-discretionary).
Slide 21: Q2 2021: Strong balance sheet to support acquisitions
Q2 2021: Strong balance sheet to support acquisitions Debt KPIs Gross and net leverage +1.0x / +0.3x ($m) Q3 20 Q4 20 Q1 21 Q2 21 6.0x 5.9x 4.9x 4.7x Cash & cash equivalents 466 429 670 640 2.9x 2.9x 3.0x 3.2x Bond 975 975 975 975 Convertible bond(1) - - 205 247 Q3 20 Q4 20 Q1 21 Q2 21 SA loan facil
Slide 22: H1 2021 Cash flow: Solid portfolio free cash flow generation
H1 2021 Cash flow: Solid portfolio free cash flow generation with moderate increase in receivables days ($m) 2019 2020 H1 21 Key highlights Adj. EBITDA 205 227 114 1 Decrease in cash conversion reflects increased site Non-discretionary capex, leases & taxes (1,2) (36) (52) (40) count and timing of n
Slide 23: Q2 2021: Return on Invested Capital
Q2 2021: Return on Invested Capital Disciplined capital allocation driving strong value creation for the business – Temporary ROIC impact during execution phase of the Group’s growth and diversification strategy – Acquisitions support strong medium term returns and organic growth for the Group Retur
Slide 24: H1 2021: Key takeaways
H1 2021: Key takeaways 1 Strong H1 performance as M&A and organic growth continues: Senegal closed, acquisitions announced in five new markets while delivering continued operational excellence in our established markets 2 Continued progress on the Airtel and Omantel acquisitions which, upon completi
Slide 25: Q&A
Q&A KY peur MA ‘ % % % LN BAY AY & x % x
Slide 26: Helios Towers market overview
Helios Towers market overview Multinational MNOs PoS PoS Growth Oman- Oore- Mobile Towers Additions(2) CAGR(2) Airtel Africell MTN Orange Axian(3) Voda Viettel tel doo Penetration(1) Available(2) (2020 – (2020 – 2026E) 2026E) Tanzania 41% 0.6k 5.5k 6% DRC 40% 1.2k 5.7k 11% Ghana (4)
Slide 27: Platform for successful integration
Platform for successful integration Well positioned for successful acquisition integration through regional CEO structure, dedicated launch teams and standardised 100-day plan Dedicated new market teams Acquisition integration timeline New In-country Group support MNO staff Q3 20 Q4 20 Q1 21 Q2 21 Q
Slide 28: Condensed consolidated statement of profit or loss
Condensed consolidated statement of profit or loss 6 months ended 30 June H1 2021 H1 2020 US$m US$m Revenue 212.4 204.0 Cost of sales (138.4) (130.2) Gross profit 74.0 73.8 Administrative expenses (43.9) (43.2) Loss on disposal of property, plant and equipment (3.2) (1.3) Operating profit 26.9 29.3
Slide 29: Condensed consolidated statement of financial position
Condensed consolidated statement of financial position 30 June 2021 31 December 2020 US$m US$m Non-current assets Intangible assets 195.8 23.2 Property, plant and equipment 674.7 594.7 Right-of-use assets 129.7 109.2 Derivative financial assets 79.5 88.8 1,079.7 815.9 Current assets Inventories 9.6
Slide 30: Management cash flow
Management cash flow 6 months ended 30 June (US$m) 2021 2020 Adjusted EBITDA 114.2 109.1 Less: Maintenance and corporate capital additions (14.3) (7.4) Payments of lease liabilities (1) (15.2) (11.3) Tax paid (10.9) (1.3) Portfolio free cash flow 73.8 89.1 Cash conversion % (2) 65% 82% Net payment o
Slide 31: Return on invested capital
Return on invested capital Q2 21 US$m 2017 2018 2019 2020 Ann. (2) Property, plant and equipment 705.7 676.6 631.9 594.7 674.7 Accumulated depreciation 383.0 490.6 597.2 713.0 766.8 Less: Accumulated maintenance + corporate capital expenditure (135.4) (151.8) (163.9) (180.6) (194.8) Gross property,
Slide 32: Disclaimer
Disclaimer This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in Helios Towers plc (the "Company") or any other member of the Helios Towers group